Rumours About Dell’s AMD-Based Computers Heat Up Again

Rumours about possible usage of processors by Advanced Micro Devices by Dell, the world’s largest computers maker, recently emerged once again when an analyst said that Dell might be stockpiling AMD chips to gear up for a large scale launch. Other rumours suggest that Dell’s recently unveiled XPS 600 Renegade will sport either AMD’s or Intel Corp.’s processors.

“We strongly believe that Dell will start AMD-based system shipments as early as (the second half of 2006),” Piper Jaffray analyst Les Santiago wrote in a report. He based his view on conversations with unnamed sources in the PC component supply industry, press reports indicating Asian designers are working on AMD-based systems for Dell, AMD inventory shortages suggesting Dell is purchasing the chips and other factors, CNET News.com reports. Dell declined to comment.

In November 2005 several wires reported that Dell had informed its Taiwan contract makers, such as Asus, Foxconn and Quanta, of plans to develop devices based on AMD’s microprocessors, and these suppliers are awaiting orders for global shipment, it is reported. Foxconn, which belongs to Hon Hai Precision Industry Co Ltd develops AMD-powered servers, ASUS designs mainboards and Quanta Computer develops notebooks based on AMD microprocessors. Dell called the information “rumours” and speculation.

Dell has been historically rejecting AMD processors citing the world’s second largest x86 microprocessor maker’s inability to supply its chips in mass quantities. Indeed, Sunnyvale, California-based AMD has been suffering from chip shortages for years being unable to fulfill the demand towards its products due to various reasons.

But while production capacities of AMD cannot be compared to Intel Corp.’s, who is rapidly transitioning to 65nm process technology to be able to ship even more chips, microprocessors manufactured by the smaller maker have been praised by analysts and press for their performance and relatively low power consumption.

But while the analysts predicted that Dell would start using processors by Advanced Micro Devices in the second half of the year, the Q3 is a timeframe when Intel is expected to release its new processors code-named Conroe that are projected to offer increased performance amid moderate power consumption on the desktop. This may undermine AMD’s abilities to compete in the desktop market, but the company may sustain its advantage in the server market for a few months from then before Intel releases its next-gen server chips.

Another rumour spread in a forum by an allegedly Dell employee is that the computer giant will release its gaming PCs running AMD processors this spring and the first of such products will be the XPS 600 Renegade system equipped with four graphics processing units.

Back in 2004 approximately 19% of Intel’s revenues came from Dell and about 16% from HP. No other computer makers accounted for more than 10%.